IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF AUGUST, 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.319 OF 2014 BETWEEN:
Khaleel Ahmed S/o. Bashu Saheb, Aged about 65 years, Proprietor of M/s. Khaleel Ahmed, B.M.Road, Halagur-571 421 Malavalli Taluk, Mandya District.
(By Sri. Gururaj R, for Sri. Vighneshwar S. Shastri, Advocate) AND:
Sri. Padma Kumar S/o Jinraj Shetty Aged about 58 years Proprietor of M/s. Padam Shree Fabrics, No. 210,211, 2nd Floor, Near Jodhpur Sweets R.T. Street Bangalore – 560 003.
(By Sri.K.G. Sadashivaiah, Advocate ) **** …Appellant ...Respondent This Regular First Appeal is filed under Section 96 of the Code of Civil Procedure, 1908, against the judgment and decree dated:30-09-2013 passed in O.S.No.25297/2011 on the file of the 26th Additional City Civil Judge, Mayohall, Bangalore, decreeing the suit for recovery of money.
This Regular First Appeal coming on for Hearing this day, the Court delivered the following:
J U D G M E N T This is a defendant’s appeal. The present respondent as a plaintiff had instituted an Original Suit in O.S.No.25297/2011 against the present appellant arraigning him as a defendant in the Court of the XXVI Additional City Civil Judge, Mayo Hall, Bangalore (hereinafter for brevity referred to as the “Trial Court”), for recovery of a sum of `3,00,000/- including interest there upon at the rate of `24% per annum.
2. The summary of the case of the plaintiff in the Trial Court was that, the plaintiff was doing the business of Textile goods. The defendant who is a Tailor and also a retail dealer of Textile goods purchased the cloths from the plaintiff on various dates. Accordingly, the plaintiff supplied the Textile material to the defendant under eleven bills as detailed in the plaint. Towards the total amount under those eleven bills, the defendant paid only a partial amount, but failed to repay the balance amount, which according to the plaintiff, was a sum of `2,17,965/-. Since the defendant failed to pay the said amount despite issuing him a legal notice, the plaintiff was constrained to institute a suit against him. With this, the plaintiff had claimed the principal amount of a sum of `2,17,965/-, an interest of a sum of `81,035/- and legal notice charges of a sum of `1,000/-, thus in total a sum of `3,00,000/- from the defendant with interest there upon at the rate of `24% per annum from the date of filing of the suit till its realisation.
3. In response to the suit summons, the defendant appeared through his counsel in the Trial Court and denied all the plaint averments. However, he admitted that he was purchasing the goods from the plaintiff, but contended that with respect to first three bills dated 17-01-2008 and 22-01-2008, he had made payment through cheques. With respect to other two bills, both dated 12-03-2008, he had issued three post-dated cheques to the plaintiff after deduction of 24% discount on the total bill amount. However, the defendant did not encash those three cheques since he had altered the date by himself on those three cheques. Therefore, when the representatives of the plaintiff by name Sri.R. Ramesh and Sri. Manik had come to him, the defendant had paid a cash of a sum of `53,000/- to them.
The defendant further stated that with respect to bill No.4682, no goods were supplied to him. With respect to bill No.4805, the amount was paid in cash. With respect to bill No.4940, 4957 and 4959, the delivery of the goods was not taken by the defendant, as such, the question of making any payment towards them does not arise.
The defendant also took a contention that, the Trial Court had no territorial jurisdiction to try the suit since the defendant was running the business in a village called Halagur in Malavalli Taluk of Mandya District.
4. Based on the pleadings of the parties, the Trial Court framed the following issues for its consideration:-
“1. Whether the plaintiff proves that an amount of Rs.2,17,965/- is due from defendant towards principal?
2. Whether defendant proves that they have paid entire amount?
3. Whether the defendant prove that he has not taken delivery of materials under bill No.4940, 4957 to 1959 dt.29/7/2008?
4. Whether suit of the plaintiff is bad for non-joinder of necessary parties?
5. Whether the plaintiff is entitled for interest at the rate of 24% per annum?
6. Whether the plaintiff is entitled for the reliefs sought for?
Additional Issue:
Whether this Court has got territorial jurisdiction to try the suit?
7. What order or decree?”
5. In support of his case, the plaintiff got himself examined as PW-1 and got marked documents from Exs.P-1 to P-23. The defendant got himself examined as DW-1 and got marked documents from Exs.D-1 to D-11.
6. After hearing both side, the Trial Court by its judgment and decree dated 30-09-2013 answered issues No.1, 5, 6 and additional issue in the ‘affirmative’ and issues No.2, 3, and 4 in the ‘negative’ and decreed the suit of the plaintiff, holding him entitled to recover a sum of `3,00,000/- from the defendant with interest there upon at the rate of `18% per annum from the date of the suit till realisation. It is against the said judgment and decree, the defendant has preferred this appeal.
7. Lower Court records were called for and the same are placed before this Court.
8. Heard the arguments of the learned counsel for the appellant/defendant and perused the material placed before this Court including the memorandum of appeal and the impugned judgment.
9. Since the learned counsel for the respondent/plaintiff did not appear to address his arguments, his argument is taken as not addressed.
10. For the sake of convenience, the parties would be henceforth referred to with the ranks they were holding before the Trial Court respectively.
11. In the light of the materials placed and the arguments addressed, the points that arise for my consideration in this appeal are:
1] Whether the plaintiff has proved that the defendant is liable to pay to him the suit claim?
2] Whether the defendant is liable to pay interest to the plaintiff as claimed?
3] Whether the judgment and decree under appeal warrants any interference at the hands of this Court?
12. PW-1 in his Examination-in-chief in the form of Affidavit evidence reiterated the contentions taken up by him in his plaint. He has reiterated that at the request of the defendant, the plaintiff supplied Textile goods to the defendant under eleven bills which are detailed in the plaint as well in his Affidavit evidence as detailed below:-
PW-1 in his evidence has stated that the defendant remained due in a sum of `2,17,965/- towards the principal amount. Adding interest there upon at a sum of `81,035/- and legal notice charges at a sum of `1,000/-, the plaintiff has stated that the defendant was due to him, in a sum of `3,00,000/- as on the date of filing of the suit.
In his support, the plaintiff produced a copy of Value Added Tax Registration Certificate at Ex.P-1, tax invoices at Exs.P-2 to P-12, lorry receipts at Exs.P-13 to P-18, computer generated statement of account at Ex.P-19, copy of his legal notice at Ex.P-20, postal acknowledgement at Ex.P-21, reply to his notice at Ex.P-22 and copy of his caveat petition at Ex.P-23.
13. Though in his cross-examination, PW-1 admitted a suggestion as true that with respect to first three bills dated 17-01-2008 and 22-01-2008, he has received payment, but stated that the payment was only a part payment. Though initially the witness denied the suggestion that one Sri. Ramesh and Sri.Manik were his employees, but, at a later stage, in his cross-examination, admitted a suggestion as true that those two persons were working under him and were collecting the dues.
14. DW-1 in his Examination-in-chief in the form of Affidavit evidence also has reiterated the contentions taken up by him in the Written Statement. Though he admitted his business transactions with the plaintiff, but stated that, he has not received all the goods that were shown in the bills mentioned in the plaint. He stated that some of the goods were not received by him and one consignment was not delivered to him. He contended that with respect to the first three bills, he has already made payment through cheques and with respect to subsequent bill amounts, he has paid it by cash. He stated that he is in no way liable for any sum to the plaintiff.
In his support, he got produced and marked the statement of account at Ex.D-1; order forms at Exs.D-2 to D-4 and D7 to D-9; copies of tax invoices at Exs.D-5 and D-6 and two cash receipts at Exs.D-10 and D-11.
In his cross-examination, DW-1 admitted that the goods under bills have been delivered to him through Sree Annapoorna Transport. However, he denied a suggestion that, he was due to the plaintiff towards suit claim. He also denied that he is liable to pay interest to the alleged outstanding due. He also denied a suggestion that Ex.D-6 is a fabricated document and that the alleged signature of Sri.R. Ramesh in it is also not the signature of the alleged Ramesh.
15. Learned counsel for the appellant/defendant in his argument reiterated the contentions taken up by the defendant in his Written Statement. He stated that even though the defendant had cleared the entire dues to the plaintiff, still, the plaintiff has instituted a false suit against him. He further stated that the plaintiff himself has admitted that he had two employees by names Ramesh and Manik and as such, the payments made to them amounting to `53,000/- have also stood established.
16. From the above, it is clear that, the defendant has admitted his acquaintance with the plaintiff under the business relationship between the parties to the suit. The defendant has also admitted that, he was getting the Textile materials from the plaintiff as and when required. Though the plaintiff has stated that he used to get order forms from the defendant on certain occasions, but he has also stated that many of the orders were placed with him orally by the defendant. The said statement of PW-1 has not been denied in his cross-examination from the defendant’s side.
17. In order to show that he has supplied the goods at the desire of the defendant, PW-1 has got produced eleven (11) tax invoices from Exs.P-2 to P-12. He has also got produced six(6) lorry receipts, and contended that several of the goods under those bills were sent to the defendant through Sree Annapoorna Transport, a transport operator.
In the cross-examination of PW-1, the defendant has not specifically made any suggestion to the witness about the non-supply or non-delivery of the goods to him which are alleged to have been supplied to him under Exs.P-2 to P-12.
18. On the other hand, the defendant as DW-1 in his cross-examination has admitted a suggestion as true that the goods under the bills have reached the defendant through Sree Annapoorna Transport. By specifically admitting the said suggestion as true, the defendant has falsified his contention in the Written Statement that with respect to bill Nos.4682, 4957, 4940 and 4959, he has not received the goods. On the other hand, it stands established that, the defendant had received the goods under all the eleven bills produced by the plaintiff at Exs.P-2 to P-12. Admittedly, the amounts shown in those bills as against supply of goods are not in dispute. As such, the total amount of goods supplied under those bills results in the amount payable by the defendant to plaintiff. Though the said amount comes to a sum of `3,26,595/-, the plaintiff has claimed only a sum of `2,17,965/- as an outstanding amount.
19. In that regard, the plaintiff has also got produced and marked a computarised account statement of the defendant said to have been maintained by him and exhibited and got it marked at Ex.P-19. The said statement of account which has not been denied or disputed by the defendant shows that, the plaintiff had maintained an account in the name of the defendant, wherein the details of the invoices under which the goods are said to have been supplied along with the invoice amounts have been shown in the debit column and the payments received towards those invoices have been shown in the credit column. Though the defendant contends that he has made two payments amounting to `30,000/- in total and which are documented at Exs.D-10 and D-11, they have also been reflected in the said statement of account as the amounts received in cash.
20. Thus, the two cash payments made by the defendant have also been properly given deduction in the alleged outstanding liability of the defendant. After giving all those deductions, towards the payment made by the defendant to the plaintiff, the said statement of account shows an outstanding due of a sum of `2,17,965/- as payable by the defendant to the plaintiff.
21. It is the contention of the defendant that with respect to two bills, both dated 12-03-2008 under bill Nos.4630 & 4631, three cheques were issued by him to the plaintiff. However, the plaintiff failed to encash those three cheques. On the other hand, the cash payment in total amounting to `53,000/- was made to one Sri. Ramesh and Sri. Manik, the employees of the plaintiff and cleared the dues under those two bills after deducting `24% discount in it. PW-1 has categorically denied those suggestions. Though at one place, the plaintiff has admitted that he had two employees by names Sri. Ramesh and Sri. Manik, but he has not accepted that they have received any cash amount from the defendant towards any of the amounts due in the bills.
In such a situation, the burden of proving that the cash payments in total amounting to `53,000/- was made to said Ramesh and Manik as a payment towards the two bills payable to the plaintiff, is upon the defendant. In that regard, the defendant has produced two tax invoices at Exs.D-5 and D-6. These two are the invoices/bills bearing Nos.4630 and 4631. On the back side of Ex.D-6, there are two writings, acknowledging the receipt of a sum of `30,000/- and a sum of `23,000/- in cash on two different dates. As a token of receipt, two signatures are found on the backside of the bill at Ex.D-6. However, it is not proved as to whose signatures they are and whether the alleged signatories were agents of the plaintiff authorised to receive the amount on behalf of the plaintiff. When PW-1 in his cross- examination has specifically denied that he had authorised either said Ramesh or Manik to collect any amount and when from the plaintiff’s side it was categorically suggested to DW-1 in his cross- examination that the plaintiff had never authorised Ramesh and Manik to collect any amount and the alleged endorsement in Ex.D-6 is not that of said Ramesh and so also the alleged signatures, then, the burden of proving that the said cash payments were made to the plaintiff through the said Ramesh and the alleged two endorsements and signatures are that of the said Ramesh only, was upon the defendant. However, the defendant has failed to discharge the said burden. He has neither called upon the said Ramesh and examined him as a witness nor produced any other oral or documentary evidence in support of his contention of alleged payments. Thus, it remains that the defendant, except establishing that, he had made two cash payments as per Exs.P-10 and P-11, could not able to prove his alleged payment of amounts due under any of those bills and clearing of the dues towards the plaintiff.
22. Even though the defendant has produced statement of account at Ex.D-1, but a perusal of the statement of account at Ex.D-1 does not give any picture as to what it denotes. When a document which is not self-explanatory is produced as an exhibit, a mere production of the document and marking it as an exhibit would not help the person who produces the said document. Apart from producing the document, the defendant ought to have explained as to why he is producing the said document and what it denotes. Since Ex.D-1 runs into several pages and contains several entries of monetary transactions in it, by looking at the dates, the cheque numbers and the amounts therein, it cannot be inferred that the amounts shown therein would also include the amounts alleged to have been paid to the plaintiff. As such, the fact stands proved that the plaintiff had supplied goods under eleven bills as shown in the plaint as well in the evidence of PW-1 to the defendant. But the defendant has admitted in his cross-examination that, he has received the same through Sree Annapoorna Transport. The undisputed invoice amount shown against those supply bills would show that the defendant was due to the plaintiff of the sums shown in those bills. Since the plaintiff has produced the statement of account at Ex.P-1, which has remained undisputed, the outstanding liability of the defendant towards the plaintiff stands proved at a sum of `2,17,965/-. It is the very same amount which the plaintiff has demanded from the defendant by issuing a legal notice as per Ex.P-20. Even though the defendant has replied to the said notice as per Ex.P-22, but even in the said reply also, the defendant has failed to show that he has cleared the dues towards the plaintiff. Therefore, as rightly held by the Trial Court, the plaintiff has established the principal amount due to him from the defendant.
23. The plaintiff has claimed an interest on the outstanding amount at a sum of `81,035/-. Neither in the plaint nor in the evidence as PW-1, the plaintiff has stated as to at what rate and on what basis, he has calculated the interest and arrived at such a figure. However, in his cross-examination, he has stated that the tax invoices at Exs.P-2 to P-12 mention that the defendant is liable to pay interest at the rate of `24% per annum, if the payments are not made within thirty(30) days. The very same plaintiff in the cross-examination of DW-1 has suggested to the witness that for the delayed payment, the defendant was liable to pay interest at the rate of `20% per annum. Thus, the amount of `81,035/- claimed by him as the interest amount proves to be on the higher side than what the defendant is required to pay him. Further, the alleged legal notice charges also has not been established by him. As such, the entitlement of the plaintiff could only be to the extent of outstanding principal amount due at `2,17,965/- and interest at the rate of `20% per annum there upon from the alleged due date. Since the said amount of `2,17,965/- is shown as due in the statement of account at Ex.P-19 as on 28-08-2009, the entitlement of interest at the rate of `20% per annum on the principal amount of `2,17,965/- could be only from the said date of 28-08-2009 till the date of filing of the suit i.e. on 11-02-2011.
24. Though the suit transaction is a commercial transaction, however, considering the prevailing market rate of interest, I am of the view that awarding of interest at the rate of `20% per annum would be on the higher side. As such, under Section 34 of the Code of Civil Procedure and considering the circumstances of the case, I am of the view that interest should be reduced and fixed at `18% p.a. from the date of the suit till realisation. It is only to this extent of modification of the principal amount and the rate of interest, the impugned judgment and decree deserves interference in it.
Accordingly, I proceed to pass the following:-
O R D E R [i] The appeal is allowed in part;
[ii] The judgment and decree dated 30-09-2013 passed in O.S.No.25297/2011 on the file of the 26th Additional City Civil Judge, Mayohall, Bangalore, is hereby modified to the extent that the plaintiff is held to be entitled for the principal amount of a sum of `2,17,965/- from the defendant together with interest there upon at the rate of `20% per annum from 11-02-2011 till the filing of the suit and interest at the rate of `18% per annum on the total outstanding liability as on the date of institution of the suit from the date of suit till the date of realisation.
[iii] Draw the modified decree accordingly.
Registry to transmit a copy of this judgment along with the Lower Court records to the concerned Trial Court, without delay.
Sd/- JUDGE BMV*